Watchlist: 2nd week February

I did some research on S&P and Morningstar to compare which companies on my watchlist had prices that were below their recommended fair value. I am willing to pay at fair value or slightly above fair value for a core holding. I will only pay for supporting and speculative positions when they are at a reasonable discount.

These reports were released on 1/27/2015 to 1/31/2015

Ticker	Price 2/4/2015	Morningstar Fair Value	Morningstar Price/FairValue	S&P fair value	S&P Price/FairValue
MSFT	$41.84	$46.00	90.96%	$46.60	89.79%
GE	$24.16	$30.00	80.53%	$26.80	90.15%
MA	$84.18	$88.00	95.66%	$98.10	85.81%
EMR	$57.33	$69.00	83.09%	$59.20	96.84%
CSX	$34.57	$35.00	98.77%	$36.00	96.03%
IBM	$156.96	$196.00	80.08%	$208.20	75.39%
UTX	$117.79	$116.00	101.54%	$126.30	93.26%

Ticker	Forward PE	PE	Yield	PEG	Beta	Debt/Eq	Payout
MSFT	14.20	16.87	2.96%	2.02	1.02	0.31	47.20%
GE	13.20	16.00	3.81%	2.16	1.43	2.85	49.20%
MA	23.61	27.15	0.76%	1.62	0.93	0.22	14.20%
EMR	13.70	18.80	3.28%	2.35	1.33	0.60	56.00%
CSX	14.35	17.91	1.85%	1.68	1.33	0.87	27.20%
IBM	9.34	9.97	2.80%	2.21	0.62	3.44	20.30%
UTX	15.24	17.27	2.00%	1.88	1.12	0.59	34.20%

The best Price/FairValue include MSFT, GE, and IBM. I am waiting on IBM to report earnings that show growth before I invest, otherwise I see it as a depressing company to hold. I am considering GE and MSFT since they both offer over 3% yield, but would not consider these holdings to ever be core due to their dividend history.

MA looks like a good growth play here. PE is higher than what I would like but you pay more to hold a growth company. The dividend is small but he dividend growth is very large, like Visa. I like MA for its moat, low debt, low PEG, and impressive growth.

EMR is another good industrial dividend aristocrat currently yielding over 3%.

I consider UTX and CSX to be fair value. Since I am very light on industrials, I am keeping GE, CSX, and EMR on my watchlists.